This filing was published in the 08/15/2007, issue, Vol. 2007, No. 16, of the Utah State Bulletin.
Insurance, Administration
R590-152
Health Discount Programs and Value Added Benefit Rule
DAR File No.: 29875
Filed: 07/23/2007, 04:02
Received by: NL
Additional changes are being made to this rule to adopt suggested changes made during the comment period and hearing.
Some of the changes have been made to fix grammatical and punctuation problems and to clarify statements made in the rule. Much of the clarification deals with distinguishing the health discount program marketer and operator and distinguishing between a health discount plan and program. Subsection R590-152-5(2) lists those that do not need to be licensed as a health discount program operator to notify the commissioner each time a health discount program marketer and private label entity changes. Subsection R590-152-5(6) requires the annual license renewal of the health discount program operator and health discount program marketer's license. Section R590-152-6 clarifies that the requirements of this section deal with the health discount program operator. Subsection R590-152-7(4) requires health discount program operator websites be updated at the end of each month. Changes to Section R590-152-8 clarify that those licensed under Chapters 7 and 8 of Title 31A may provide value-added benefits if they follow the requirements in Subsection R590-152-8(2)(a), including the requirement to comply with Sections R590-152-10 and R590-152-11 of this rule. Subsection R590-152-11(3)(c), under disclosure material, allows the health discount program operator to give the new member a list of providers in the form of a hard copy or access to their webpage. (DAR NOTE: This change in proposed rule has been filed to make additional changes to a proposed amendment that was published in the May 15, 2007, issue of the Utah State Bulletin, on page 74. Underlining in the rule below indicates text that has been added since the publication of the proposed rule mentioned above; strike-out indicates text that has been deleted. You must view the change in proposed rule and the proposed amendment together to understand all of the changes that will be enforceable should the agency make this rule effective.)
Section 31A-8a-210
Anticipated cost or savings to:The changes to this rule will not require the department to change its staff nor will there be a change in revenues. No additional filings will need to be made to the department.
This rule deals with the relationship between the department and its licensees and will not affect local government.
This rule will require health discount program operators to report changes in their marketers and private label entities. This is an electronic process that would not be done often and would not take much time. Also, allowing the health discount program operator to give the new member a website to go to in order to view their list of providers would save the operator some money in printing and postage. This savings would vary depending on the size of the provider list and the number of new members.
This rule will require health discount program operators to report changes in their marketers and private label entities. This is an electronic process that would not be done often and would not take much time. Also, allowing the health discount program operator to give the new member a website to go to in order to view their list of providers would save the operator some money in printing and postage. This savings would vary depending on the size of the provider list and the number of new members.
There could be a savings as a result of these new changes and if not, a very small increase in costs, which will vary from operator to operator. D. Kent Michie, Commissioner
Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at jwhitby@utah.gov
09/14/2007
09/21/2007
Jilene Whitby, Information Specialist
R590. Insurance, Administration.
R590-152. Health Discount Programs and Value Added Benefit Rule.
R590-152-1. Authority.
This rule is promulgated by the commissioner under 31A-8a-210, which authorizes the commissioner to enforce Chapter 8a and protect the public interest.
R590-152-2. Purpose and Scope.
(1) The purpose of this rule is to describe initial and renewal license procedures, fees, and other authorized charges, required and prohibited practices, advertising and marketing activity, disclosure requirements, provider agreements, dispute resolution, and record keeping.
(2) This rule applies to health discount
programs, health discount program operators, and health discount plan
marketers.[,]
(3) This rule
applies to[
and] a value added benefit provided by a person licensed under Title 31A,
Chapters 7 or 8.
R590-152-3. Definitions.
For the purposes of this rule, the commissioner adopts the definitions in Sections 31A-1-301 and 31A-8a-102 and the following:
(1) "Administration of the health discount
[plan]program" means the processes [used by the
health discount program ]to solicit members, enroll members, maintain the
membership, resolve disputes with members, disenroll members, and collect or
refund fees and other authorized charges.
(2) "Authority to do business in this
state" means [to have]having other applicable licenses as
required by statute and operating within the scope of such licenses.
(3) "Health discount program marketer"
means a person or entity, including a private label entity, [which]that
places its name on and markets or distributes a health discount program but
does not operate the marketed or distributed health discount program.
(4) "Private label entity" means an
entity that purchases a health discount program from [another entity and
puts their own]a health discount program operator and issues or markets
the obtained health discount program under the private label entity's name
or logo[ on the purchased health discount program].
(5) "Prominently" means not less than 14-point type or no smaller than the largest type on the page if larger than 12 point type.
R590-152-4. General Information.
(1) The commissioner may examine, audit, or investigate the business and affairs of any health discount program operator or a licensed health discount program marketer or any person the commissioner believes may be operating or marketing a health discount program.
(2) [If a]A health discount
program, [or ]a health discount program operator, or a
health discount [plan]program marketer that offers an
insurance benefit[s, then they] as part of a health discount program
or in addition to a health discount program must comply with statutes and
rules pertaining to the solicitation, negotiation, and sale of insurance in
Utah.
R590-152-5. Licensing (Application, Initial, Renewal).
(1) The following must be licensed prior to offering a health discount program:
(a) [a health discount program;
(b) ]a health discount program
operator; or
[(c)](b) a health discount program marketer[:
(i) if operating
separately from the health discount program operator whose health discount
program is being marketed by the health discount program marketer; or
(ii) if marketing] that markets health
discount programs from more than one [provider of health discount programs]health
discount program operator.
(2) The following do not require a license as a health discount program operator or health discount program marketer:
(a) a licensee licensed under Chapters 7 or 8 if only offering a value added benefit;
(b) a health discount program marketer or private label entity issuing or selling one of more health discount programs obtained from a single health discount program operator.
(3) The "Application for Health Discount Program Operator or Health Discount Program Marketer" must be completed and submitted with the appropriate fee.
[(3)](4) The commissioner may deny an application
from [a health discount program, ]a health discount program operator[,]
or a health discount program marketer if the applicant would not be in
compliance with Chapter 31A-8a because the applicant, in this or any other
jurisdiction, for a matter dealing with a health discount program is:
(a) under investigation; or
(b) has been found in violation of a statute or regulation.
(5) A licensed health discount program operator must notify the commissioner each time a health discount program marketer or private label entity is added or deleted during the annual licensure period.
(6) Annual licensure period.
(a) A license issued under this section is for one annual period which expires each December 31st.
(b) A licensee desiring to continue to do business in this state must renew its license prior to December 31st each year by submitting an Application for Health Discount Program Operator or Health Discount Program Marketer and paying the required fee.
R590-152-6. Fees and Other Authorized Charges.
(1) A health discount program operator may provide discounts or free services through contracted providers to subscribers in exchange for a periodic payment to the program or as a benefit in connection with membership in a particular group.
(2) A health discount program operator may charge:
(a) a non-refundable one-time enrollment charge; and
(b) a refundable periodic fee.
(3) A health discount program operator that
charges fees for a time period in excess of one month must, in the event of
cancellation of the membership by [the health discount program or ]the
health discount program operator, make a pro-rata refund of the periodic fees
paid by the member.
R590-152-7. Required Practices.
(1) A health discount program operator must have an active toll-free telephone number for members to call.
(2) Face to face, paper, telephone, and electronic communications with clients or potential clients must state that the health discount program is a discount plan and not insurance.
(3) When a health discount program [marketer]operator
or a health discount program marketer sells a health discount program
together with any other product that can be sold separately, including insured
benefits, an itemized list of the fees or premiums for each individual product
must be provided in writing to the client at solicitation.
(4) Information available to a health discount
program member via a health discount program operator's web page must be
[updated within 15 days of any change in the information]current at
the end of each month.
R590-152-8. Value Added Benefit.
(1) Any value added benefit must actually exist and a copy of the contract verifying such existence must be available upon request to the commissioner.
(2) Prior to any offering of a value added benefit, a person licensed under Title 31A, Chapter 7 or 8, shall:
(a) file with the commissioner a value added benefits list that includes the following:
[(a)](i) the insurer's name and address;
[(b)](ii) the insurer's policy form number(s) to
which the value added benefit applies; and
[(c)](iii) a description of the benefits offered.
(b) comply with Sections R590-152-10 and 11, if providing a member discount card.
R590-152-9. Prohibited practices.
(1) A health discount program operator may not make any payments to providers for:
(a) participation in the health discount program;
(b) capitation payments;
(c) signing fees;
(d) bonuses; or
(e) other forms of compensation.
(2) A health discount program operator may not offer any insurance benefits unless licensed as an insurance producer and contracted and appointed by the insurer providing the insurance benefits.
R590-152-10. Advertising and Marketing.
(1) The format and content of any advertisement shall be sufficiently complete and clear as to avoid deceiving or misleading the reader, viewer, or listener.
(2) An advertisement of any insured product or benefit must comply with applicable provisions of Subsections 31A-23a-102 (12) and (13) and Rule R590-130, Rules Governing Advertisements of Insurance.
(3) A health discount program operator must
approve in writing all advertisements, marketing materials, brochures, and
discount cards used by a health discount program marketer marketing [the]a
health discount program operator's health discount program.
(4) All advertisements, marketing materials,
brochures, and discount cards used by a health discount program operator and
the health discount program operator's health discount program marketer and by
a health discount program marketer marketing [the]more than one
health discount plan operator's health discount program must be available
to the commissioner upon [his ]request.
(5) The health discount program operator must
have an executed written agreement with a health discount program marketer
prior to the health discount plan marketer marketing, promoting, selling, or
distributing [the]a health discount program.
R590-152-11. Disclosures.
(1) A health discount program operator must provide the disclosures required by Section 31A-8a-205.
(2) The membership card shall prominently state: "This is not health insurance."
(3) Disclosure materials provided to a purchaser or potential purchaser must include:
(a) membership materials;
(b) new enrollee information;
(c) a printed list of providers, or access to the health discount program operator's web page, that have agreed by written contract with the health discount program to accept the program;
(d) a statement that "A health discount program member is responsible for the entire payment of their medical or health care bill after the discount is applied."; and
(e) the complete terms and conditions of any refund policy.
(4) A health discount program operator or health discount program marketer must:
(a) provide a purchaser a 30-day money back guarantee, which allows the purchaser to terminate the contract and receive a full refund of any periodic fee paid; and
(b) the 30-day period must commence when the purchaser receives the membership materials.
R590-152-12. Contracts.
(1) A provider agreement between a health discount program operator and a provider network shall require:
(a) the provider network to have a written agreement with each provider in the network authorizing the provider network to contract with a health discount program on behalf of the provider; and
(b) the health discount program operator to inform each provider within the contracted provider network with information about the health discount program.
(2) A provider agreement between a health discount program operator and another health discount program operator that has contracted with a provider network shall require the contract with the provider network to comply with Subsection (1).
R590-152-13. Dispute Resolution Procedures.
A health discount program operator must:
(1) file its dispute resolution procedures with the commissioner pursuant to Section 31A-8a-203; and
(2) comply with its filed dispute resolution procedures.
R590-152-14. Penalties.
A person found, after a hearing or other regulatory process, to be in violation of this rule shall be subject to penalties as provided under Section 31A-2-308.
R590-152-15. Enforcement Date.
The commissioner will begin enforcing the revised provisions of this rule 45 days from the rule's effective date.
R590-152-16. Severability.
If any provision of this rule or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the rule and the application of such provision to other persons or circumstances shall not be affected thereby.
KEY: insurance, medical discount plans
Date of Enactment or Last Substantive Amendment: 2007
Notice of Continuation: November 27, 2002
Authorizing, and Implemented or Interpreted Law: 31A-1-103; 31A-2-201
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For questions regarding the content or application of this rule, please contact Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at jwhitby@utah.gov For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764).
Last modified: 08/14/2007 5:32 PM